Budgetboost.co is supported by its readers. If you click on or buy something via a link on this page, we may earn a commission.

Budgetboost.co is supported by its readers. If you click on or buy something via a link on this page, we may earn a commission.

Benefits of Investing in Real Estate

There are a lot of benefits to investing in real estate, but there are a lot of different things to consider when making choices that can impact those benefits. As such, it is important to choose wisely when investing in real estate to make sure that you get the most bang for your buck.

So here are some of the biggest benefits to consider when investing in real estate.

Cash Flow

Real estate investing’s primary focus should always be on cash flow, with appreciation of the property second. Cash is king, and investing in real estate is designed to maximize this cash flow.

Inflation Protection

Since the returns from real estate investing are directly linked to the rent’s received, you have control over what to charge. As such, you can increase rental rates (thus cash flow) as needed to keep up with inflation. It is very common to raise rates after a vacancy, but some leases have inflation adjustments built in automatically. We talk about the best places to invest in real estate in another article and how to work with inflation. There’s always crowdfunding investing too and we talk about that in our Fundrise review. By adjusting for inflation, a real estate investor can maintain real returns no matter the economic environment. If you wonder how inflation could impact your real estate investment, you should look at getting investment advice from IPIN news.

Control

Many people also like investing in real estate because, like a small business, the owner has full control over the investment. Choices such as rents received, how much mortgage debt to assume, and even small costs like gardening, can all be decided by the owner. Thus, the net return of the real estate investment can be a little more controlled than other investments, unlike investing in the stock market, where the company’s CEO decides the choices the company makes. This gives many real estate investors more peace of mind when it comes to their investments.

3 Comments

John on at

So true: people like investing in real estate because of the level of control it provides. Anything you own, you have a great deal of control over. That’s why I’d recommend paying for real estate with cash – no mortgages! Get out of debt, save up the money, and pay cash! You’ll be glad you did.

Thomas - Ways to Invest Money on at

Unfortunately most people will never put themselves where they will be able to pay for real estate with cash of get a 10-15 year mortgage. I agree with real estate should be cash flow sadly many got caught up and think that all real estate is bad.

Cash Flow Notes on at

Great Article.

Conventional wisdom would have you believe that investing during times when real estate is rapidly appreciating is the best way to accumulate wealth. I disagree. I think that when real estate is rapidly appreciating, it is a sign that there is a great disequilibrium in the market. Investing for appreciating is a double edged sword because you have no control over the market and therefore, you can not rely on the returns generated by your investment. I believe that investing for reliable cash-flow in non-volatile markets is the best way to accumulate wealth. After all, if you have $20,000 invested at 11% for 22 years and only let your initial deposit compound, the ending result is staggering:$222,451.24. Why is it that less than 10% of all americans have this amount in their retirement account? Because they invest for appreciation,whether it be stocks or real estate.

Learn to Budget Better and Make More Money

Get our in-depth guide that will teach you how to save more, make more & transform your finances.